Vietnam’s recent upgrade by FTSE Russell has successfully placed its stock market on the radar of massive international fund managers, with representatives from the State Securities Commission (SSC) confirming significant interest from institutions managing hundreds to thousands of billions of U.S. dollars.
Strategic Upgrade Draws Passive and Active Funds
Speaking at an event hosted by the Vietnam Securities Journalists Club, Mr. Bui Hoang Hai, Vice Chairman of the SSC, emphasized that the FTSE Russell reclassification of Vietnam’s market to Secondary Emergingstatus marks a vital milestone in the market’s 25-year development. He noted that historically, many large-scale global investors, both active and passive, largely overlooked Vietnam. However, immediately before and after the upgrade, these investors have begun engaging directly with the SSC. Market Insider reported.
“Right before and after the market upgrade, they came to Vietnam and had many exchanges with the SSC. In fact, many investors managing large amounts of capital, from hundreds to thousands of billions of US dollars, have expressed interest in the Vietnamese stock market,” Hai shared.
The Ministry of Finance and the SSC have been preparing a comprehensive suite of supply- and demand-side solutions to fully leverage the benefits of the upgrade.
Regulatory Reforms to Ease Foreign Access
On the demand side, the regulator is implementing measures to create an increasingly favorable environment for foreign investors. Key reforms include mandating simultaneous information disclosure in English to ensure equitable access to information, and crucially, abolishing the pre-funding requirement, which helps foreign investors mitigate foreign exchange risks.
On the supply side, a major focus is diversifying the market’s product offerings, with a key upcoming initiative being the listing of Foreign Direct Investment (FDI) enterprises. Mr. Hai confirmed that after receiving consensus from relevant ministries, the market can anticipate companies with FDI origins conducting Initial Public Offerings (IPOs) and listing their shares soon.
Infrastructure and Product Development for Growth
To cope with the anticipated inflows, Ho Chi Minh Stock Exchange (HoSE) Acting Chairwoman, Ms. Nguyen Thi Viet Ha, stressed the urgent need to continue upgrading information technology systems and enhancing the quality of listed “goods.” The goal is to continuously attract high-quality companies to satisfy the needs of both domestic and international investors.
The Hanoi Stock Exchange (HNX) is focusing on developing the government bond market in coordination with the State Treasury to help the government mobilize resources for public investment. Mr. Nguyen Anh Phong, Chairman of HNX, also noted that the exchange plans to refine the interest rate yield curve to better reflect market conditions, offering a more credible reference point for investors. Furthermore, HNX will continue to research and report to the SSC on introducing stock index options products, adhering to the strategy of developing the derivatives market from simple to complex instruments.
Economist Can Van Luc also weighed in, highlighting the critical need to increase the supply of high-quality new listings, stressing that seeing companies move from HoSE to UPCoM is a “backward” step. He also emphasized the importance of growing the fund industry, particularly developing open-ended funds, to maximize resource mobilization.
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Source: Vietnam Insider